Over the last few decades, technology has produced a dramatic effect on all aspects of our lives, from our social interactions to the way we work, and financial investment is no exception. The impact of technology on investment has been enormous, andlargely beneficial to the smaller investor. Here are some of the ways that technology has changed the way that people invest.
Electronic stock exchanges
One of the earliest yet most significant changes was the advent of the electronic stock exchange. Traditionally, stock trading was all about high-pressure buying and selling that took place on crowded trading floors full of shouting, jostling traders. That began to change in 1971 when NASDAQ pioneered the first electronic stock exchange. The ASX became fully electronic in 1990 and by the end of the 1990s, stock exchanges all over the world had switched to new electronic systems, that made trading stocks quicker and easier, and enabled investors to carry out small volume trades.
Before technology revolutionised the process of share trading, if you wanted to make a trade, you’d have to contact a broker by telephone. Information on which brokers charged the highest fees was hard to come by and even finding out how your investments were doing was a laborious process that often meant waiting for your account statements in the mail.
The internet and the advance of technology has changed all that. Now investors can check CFD Broker ratings online to find which are offering the best deals, and most brokerage companies provide apps and other tools through which investors can keep track of their investments. Not only that, but investors can now access a host of charts and analysis tools that can enable them to read up on potential investments and fine tune their own investment strategies.
Personal finance apps
The growth of smartphone technology has also had an impact on the way that people invest. There is now a range of apps available for mobile devices that make it possible for investors to monitor their investments in real time, as well as making transactions and organizing their portfolios. This has helped to make the business of investing more democratic and accessible than ever.
Perhaps the most interesting developments in recent years has been the advent of the robo advisor. Many funds and brokerage companies have used the latest technology to create algorithms that manage client investment portfolios. The use of this form of artificial intelligence is likely to increase in years to come. It is already being employed in wider financial contexts, including tax and financial management, and when the technology becomes accessible for small investors, the potential for another revolution in the way that investment is carried on in Australia is enormous.
The development of technology in recent decades is a testament to the ingenuity of the human brain, and the investment industry has been at the cutting edge of many of these innovations. As the pace of technological change gathers, the future of investing promises to be an exciting one.